Pages

Thursday, November 10, 2011

What's wrong with traditional publishing and how to save it

So as you no doubt can tell from my lack of posts I'm REALLY REALLY busy with some projects I'm trying to get out for X-mas buying. But posts elsewhere on the web is making me weigh in on something.

I've found myself in the unique position of defending traditional publishing lately. Mainly because of the absolutely wonderful job that Orbit has done rolling out my husband's Riyria Revelations books. I'll admit I expected the worst (too many war-weary veterans whispered in my ear to tell me to "be afraid...be very very afraid"), but my pleasure is not just a matter of them jumping over a low expectation bar. They are smart, savvy, hardworking and I'm such a perfectionist that I'm usually very critical so if I say they are doing "things right" they are exceptional.

I do want to circle back to what they have done someday as there are things I've learned from them that other authors can benefit from but that's for another day.

"If there's a better way than Amazon to reform New York’s previously unassailable quasi-monopoly and all the suboptimal business practices the monopoly has enabled, what is it?"

And later went on to say

"But if you accept my "Suboptimal New York business practices are the result of a lack of competition" premise, then what I'd like to hear is your solution for getting New York to improve."

Well since I run a publishing company and I have a MUCH different model than any of the others I would like to address Barry's Question.

The problem with the current model is not one of of "lack of competition" it is because it is based on a "venture-capital" model. I talked about this a bit in my previous post but let me explain further.

In venture capital the "investor" is taking a HUGE risk. They are putting a great deal of money on the line and know that there is a pretty good chance that they will lose some or all of it. They usually will do several projects expecting some percentage to fail and will take a large cut on the ones that succeed to help offset. I don't begrudge the "bigger cut" after all he who bears the greatest risk should get the greatest reward.

Personally, from a business perspective I believe in a partnership model. Both parties invest something (sometimes it's money, sometimes it's time) and they each bring their talents, intelligence, experience to try apply these attributes to make the project as successful as possible. If they are good at what they do - there is profit and they both win. If not, there is failure and they each share the pain.

In the "old book business" with no ebooks, brick and mortar stores, large print runs, high advances, warehousing fees the only system available was venture-capital. But in the "new book business" we have print-on-demand and ebooks and companies, like mine, are being run out of people's homes rather than high priced New York offices. (I think many people working in those offfice would prefer to telecommute rather than brave the traffic/subway but that's another story).

Each book I put out from Ridan costs me a ton in "sweat equity" (my time, intelligence, and experience) but very little in out of pocket money (Create Space setup fees, ISBN purchase). Covers are done by my husband, editing and formatting by myself, interns, and relatively inexpensive freelancers. A Ridan book is profitable after just a few sales. And from that point out it's all "gravy" as it were.

Ridan pays higher than average royalty fees. The standard contract is a 70/30 share (70% to author 30% to Ridan) since I consider the author has more "sweat equity" put into the project than I will.

I don't "lock in" my authors. They can leave anytime they want...because I don't have that big capital investment this is possible. My thought process is if they like what I'm doing - they'll stay and not begrudge me my cut. If they don't then they have every right to find a better way to go. Could I put in a lot of work just to have someone leave and then I'm left with nothing? Sure...but it's a risk I'm willing to take. And so far no author has ever left Ridan so it is a moot point.

I don't offer advances. This would seem like a negative from the author's perspective but if I did then I would have to change the split % and force them to stay with me until the advance is paid back - it breaks the model so I don't do it.

Ridan's model is good for me, good for the authors, and ultimately good for readers as I can bring in new talent with little fear of failure. I can also bring back their favorite out of print titles such as Joe Haldeman's Forever War or A.C. Crispin's Starbridge series because of the large width of virtual shelf space.

So there you have it - my solution to how to save publishing. If more presses adopted such a model I think it would benefit all parties involved.

14 comments:

As a writer with 12 traditionally published children's books who is now switching to romantic suspense for adults, I've been studying the advantages and disadvantages of traditional publishers, smaller e-book first publishers, and self-publishing. These days I haven't found much to the advantage of big traditional publishers.

I've been somewhat wary of the smaller e-book publishers because a) most don't publicize their royalty split, and b) they can still take up to a year to get a book out, and with no advance that means no money for a year. They offer the advantages of someone else paying for cover design/editing/proofreading, and potentially some marketing muscle. That's worth a percentage, especially if you're broke, but not 50 percent or more (and it depends on how well they do each of those jobs).

The way you've outlined your company's policies, 70 percent to the author seems fair, assuming the company is putting out quality products and marketing them well. I still wonder how long it takes to get a book out and earning money, but I agree that a small publisher with a streamlined process is a challenge to Big Publishing. I expect we'll also see some literary agencies transitioning into agencies that help screened authors publish their books under the agency's name.

Hi Robin, I'm a huge fan of your model, but would this mean less money for the tradtional publishers? And would their need for cash be higher than yours, perhaps due to higher overhead and stockholders/conglomerates up the chain they have to report to?

My suspicion is that they have inefincencies/higher overhead that won't allow them to survive on the same margins that you can thrive on. (This is based on mostly nuances, and little hard data.)

Robin, as an indie, I hope more small publishing houses in various genres take note of your model. As they become more attractive to authors and readers, larger houses will be forced to adapt. I commend you for being so forthcoming about your model.

But, I would also point out that there might be some resistance from indie authors as the business changes. For an indie, the Do-It-Yourself mentality has to be built in.

Then again, when you talk to the indie author about what drives them nuts in getting a book published and selling, some themes are common:

-Few authors have enough artistic skill to make a good cover.-Few authors have any clue about marketing.-We cannot really edit our own work.-Most of us stumble on even writing our own blurbs (see marketing).

It seems like a no-brainer to me that an indie would take 49% of sales in exchange for getting expertise on those things—because if you do not have them you are dead in the water (trust me lol). However, having talked to a lot of indies, they seem to not want to give up that 70% royalty figure.

So while the publishing side is going through their transition, the authors are going to have to start considering new models too. Often, we are our own worst enemies.

We're in a transition period where Ridan's model and the success of the indie ebook have caught traditional publishers like a straight right hook to the chin.

At a guess, they will begin to incorporate *elements* of more progressive models (like Simon&Schuster's Author Portal which, while late in coming and apparently buggy, is a step in the right direction), but the corporations are so large and the business models so ingrained it will be a long time coming before they have anywhere near the agility of a small publisher or an Amazon-published ebook author.

Adding to that, you have distribution channels (talking a little out of my element here, but I think the point holds) like Wal-Mart, which has no reason or incentive to change its ways for just a couple of (Big Six) publishers who have fallen on rocky times. As a result, even publishers who WANT to change may find it hard to do so. Will Random House tell Wal-Mart that the entire model is going to change next week because they let the 21st century pass them by to this point? Doubtful.

But the competition is healthy. I don't think we want Big Six to go away...we want to see them treat and be treated equitably. Hurrah for the Ridans and the Amazons of the world for opening that door.

All I can say is that it's a confusing time to be coming in as a new author. I'm about to do the final copy edit pass on my first novel (with two more novels in the pipeline), and pretty soon I'm going to have to decide what to do with it.

I've read enough lately to be kind of scared off of the Big-6. I have a potential back-door into one of the big-6 (friend of a friend thing), but even then I'm wary of exploring it. With more novels on the way, the idea of locking myself in to a big-6 is unsettling.

But I also don't know if I want to dive in and do it solo. I actually do have some artistic skills, so I might manage the cover. (Ironically, while I always considered myself a writer, not a painter, I've made more money on my art then on my writing so far.) Mostly it's the uncertainty of doing it right my first time out.

I'm also considering small presses or author co-ops, but I haven't even begun to research who all is out there in those categories.

A nice counter-balance to Mike Shatzkin's post on his convo with Bob Mayer. (http://www.idealog.com/blog/2011/11 I found the comments section to be by far the most interesting part of that post, and the title seems a bit misleading as far as Bob's actual points . . .)

Small publishers have agility and terms for authors that are hard to argue with unless you really love doing it all yourself, and many authors do. I'd query you in a heartbeat if Ridan published YA fantasy/sci-fi.

I think we might be at a point where the advance is going to start being phased out. Most of the smaller pubs already offer only very small advances or no advances at all. And it works well both for the publisher and for the author (or at least it has for me so far). Unfortunately, a good many of the professional writers' organizations still insist you're not "really" published unless you receive an advance of a certain dollar amount, usually $1,000. This cuts out an awful lot of people, including myself, who are doing quite well as professional writers.

The sad thing about all this is that the old ways changing doesn't necessarily mean that the old houses are dying, it means that in order to return to equilibrium and find business practices that makes sense, a lot of talented professionals will need to find a new place to work. And they won't be the people at the top. The big salaries will be the last to be cut as the big houses streamline their business.

The same thing is happening in many, many fields. The great news, if you can make it work for you, is that talented professionals can go into business for themselves.

To draw a parallel - My wife and I jumped off the train of big corporate brand consulting and started our own business (doing the same thing only smaller) 4 years ago, and it's been incredible. Bottom line, and what's similar to Ridan, is that we can do everything a huge firm can do. We've created a network of the best people in the business who all have gone out on their own away from big firms. So we work with the best strategists, designers, researchers, etc in this particularly industry... but we don't have to pay for office space in a skyscraper, or support the CEO with an oversized salary. Therefore, we can undercut the cost of any proposal we want to compete for and deliver best-in-field work. Not only that, but there are tons of businesses out there who need our services but are just too small for a big firm to even bother with. But we don't need to justify 5-10 people billing for every client. So we love smaller clients.

In the meantime, back at the big firm - it's a pressure cooker in there. Fewer people carrying the same load and getting burned out fast.

It's an exciting world out there and it can be heaven or hell depending on how you approach what you want to do. We're ecstatic for ourselves, but worrying about others. I may feel like we jumped off a wounded battleship and wound up on a beautiful tropical island, but None of it is easy.

I see the same thing happening fast in publishing. The jobs will still be there, but there will be fewer of them. When fewer employees are worked harder and harder, I wonder what else will give. Will they be content to give less service to their individual writers, or will they also be forced to take on fewer writers.

First, Robin, thank you for sharing so much at the Creative Penn. The interview was stellar and full of great info - really appreciate it.

Now, my thought on traditional publishing is that they will, eventually, adopt to more indi-like processes. We'll see them launch special imprints much like Hollywood adopted to the popular indi-film busines model. I just hope it's not already too late. LL

I'm now working with two publishers who use a model similar to yours. We are definitely partners rather than employer/employee. What's especially nice is the (international) digital publisher is happy to work with the U.S. hard-copy publisher, so we all promote each other's work and companies. We're working together instead of competing, and everybody wins. Of course we're all pretty dependent on Amazon, but I think that will change as companies like Kobo challenge their monopoly.

Frankly, I could care less about saving big publishing. Why should I put a second of energy into solving their problems for them? They are truly insurmountable at this point.

Outfits like Ridan already have them beat. Many self-publishers already have them beat. Amazon beat them two years ago.

As bad as they have been, I do not trust them at all with ebooks--not just on a production and distribution level, but on an honesty level. If they can't handle basic functions like formatting a file, how can you expect them to successfully track and report individual ebook sales? That's assuming they even want to be honest. Many writers have their doubts.